4. Global Market
Largest beef producers Largest beef consumers
Others Others
United States United States
31% 31%
21% 22%
Brazil EU-27
15% 15%
India
4% Mexico
4%
Argentina
Argentina
5% EU-27 Brazil
China 5% China
14% 13%
10% 10%
Largest beef exporters Largest beef importers
Others
25% Brazil United States
23% Others 19%
38%
Russia
16%
New Zealand
Australia
7%
19%
Canada
7% India South Korea
Japan
United States 4% EU-27
8% Mexico 10%
11% 8%
5%
Source: USDA 2009 3
5. Meats Consumption Per capita (including beef, pork
and poultry)
Recommended
140
consumption
120
121
80Kg/capita
100
88
Per capita consumption
80 82
80
(kg/capita)
69
62
60
48
42
40
20
0
S
d
o
ia
7
l
ld
na
i
ic
U
pe
az
-2
ss
or
hi
ex
EU
Ru
Br
lo
W
C
M
ve
De
Source: FAO
4
6. World Population Growth and Beef Consumption
(1960 – 2050)
140
10000 Population growth, a beef
consumption driver.
120
8000
Consumption (million tons)
100
Population (million)
6000 80
2,0%
CAGR
60
4000
40
2000
20
0 0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010* 2015* 2020* 2025* 2030* 2035* 2040* 2045* 2050*
Population - Developed countries Population - Developing countries Beef Consumption**
Source: UN (United Nations) and USDA
*UN Estimates
**Beef consumption trend considering CAGR of 2.0% (from 1960 to 2008) 5
7. Per capita food consumption (Kg / Year)
180
1969/71
160 1979/81
140 1989/91
1999/01
120 2030
2050
100
80
60
40
20
0
Cereals Roots and Beans, Peas Sugar Oils Crops Meat Milk and its
Tubers and Lentils and its products
products
Source: FAO
6
9. OUR STRATEGY
South America Fresh Products
Debt for South America
North America
Cooked Products
Working Minced Products
Australia Cured Products
Capital North America
European Union Ready to Eat
Products
Asia Case Ready
Australia
Equity to Russia Products
Finance Africa
Global Brands
Growth European Union
Middle East
Marketing
Investments
- High liquidity level. - Integrate the sales and - High technology investments
- Debt equalized to cash - Access to raw material distribution platform to serve to produce value added
generation. supply globally. efficiently, local and external products.
- Strong cash position. - Leader in countries with markets, small retailers, food - Increase value added products
- Access to international surplus production. processors, restaurants, and portfolio.
capital markets to finance - Scale. other customers globally. - Customized products to each
growth. - Leader in exports globally. - Sales force distributed over market.
- Access to all meat markets. the globe. - Convenience to consumers
- Development of long term - Efficiency on selling the best day to day.
financing plan. - Exchange of best practices.
- Efficiency cost gains. product, to the best market, - Brand and Quality recognition
- Use of export platform to with the best price. and leadership.
grow. - Cost reduction - Cost reduction on sales and - Marketing investments to be
- Hands-on working capital opportunities. transport. present in consumer minds.
management. - Margin improvements. - Margin improvements. - Margin improvements.
8
10. OUR STRATEGY
50%
12%
8%
4%
Consolidated
Cost Reduction, Average
Financial Experienced Productivity, Risk
EBITDA
Structure Management Process Management
Margin
Optimization
Foundation 9
11. JBS’ History
Bertin Association*
Pilgrim’s Pride*
• JBS’ History has been built through
Inalca JBS Hides
more than 30 acquisitions in 15 years Swift Foods Co. 5 new units
with appropriated capital structure and Maringá (Amambay)
management Berazategui Tasman
(Rio Platense) Smithfield
Net Sales (in US$ billion) Colonia Caroya Beef
SB Holdings Five Rivers
Companies and assets acquired
JV Beef Jerky
Rio Branco Venado
Barretos (Anglo) Cacoal 1 Tuerto 30.3
Pres. Epitácio (Bordon) Cacoal 2 Pontevedra
Campo Grande (Bordon) Porto Velho (CEPA)
Vilhena (Frigovira)
Barra do
Pedra Preta
Garças Araputanga
Cáceres 19.8
(Frigo Marca)
(Frigosol)
(Sadia) (Frigoara) Rosário
Iturama
(Swift ARG)
(Frigosol) San Jose
Andradina
12.7
(Sadia) (Swift ARG)
1.2 1.5 1.9
0.3 0.4 0.4 0.5 0.5 0.4 0.7
(1) (2) (3)
1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
R$/US$ end of the year quotation
Source: JBS
(1) Pro Forma JBS S.A. LTM Dec07
(2) Pro Forma JBS S.A. LTM Dec08
(3) Pro Forma JBS S.A. LTM Jun09 (including 5 new units and hides operation); Pilgrim’s Pride Sep09 (Estimated); Bertin LTM Jun09 10
* Transactions subject to customary conditions for this type of business
12. Global Production and Distribution Platform
JBS’ main units and markets
JBS’ main units and markets
x =
Legend
Slaughterhouse (Beef)
Slaughterhouse and Industry
Distribution Center
Vegetable Canning Plant
Beef Canning Plant
Beef Jerky Plant (Beef Snack’s)
Slaughterhouse (Pork)
Slaughterhouse (Lamb)
x Beef and Pork Processing Plant
= Wet Blue Processing Plant
Headquarters Office
Feed Lot
Package Industry
Inland Container Terminal
Commercial Office
11
13. Brief Description
Global Production Platform
Production Units Employees Daily Slaugther Capacity
JBS Brasil 25 16.993 26.950 B
JBS Argentina 6 5.059 6.700 B
28.600 B
JBS USA 16 24.295 48.500 P
4.500 S
8.690 B
JBS Australia 10 6.995
15.000 S
Inalca JBS 8 2.019 3.000 B
73.940 B
Total JBS 65 55.361
48.500 P
19.500 S
Additional Distribution Platform
United Kingdom Russia Angola Congo Algeria Dem. Rep. of the Congo Poland
(B) Beef; (P) Pork; (S) Smalls;
12
14. JBS Consolidated Net Revenue Distribution
Revenue Distribution by Market 2Q09
Revenue Distribution by Market 2Q09
Italy
Australia Argentina
4%
11% 2%
Brazil
Pork USA
16%
13%
Beef USA
54%
Source: JBS
13
15. Sustainability
Actions Sustainability Policies
Reduction of Greenhouse JBS is aware of its responsibilities as the largest beef Company in the world and all the impacts its operations
Emissions, Effluents
Gases emission (GHG) generates in every region. The Company has a appropriate sustainability program in each of its units including:
and W aste
Environmental Policy Natural Resources Usage
Procedures Adopted Social-environmental Actions
50% Effluent reutilization
50% Solid waste recycling Informative Policy Waste Treatment
Energetic Matrix development Community Relationship and Environmental Investments
Energy
Use of certified wood
25% Consume reduction
JBS is the first and only beef Company to register a CDM project at the
35% Consume reduction UNFCCC (United Nations Framework Convention on Climate Change).
W ater
(2m3 per head) The project is in validation phase at the designated national authority.
Flora conservation
Biodiversity
Animal origination control
Sustainability Principles Priorities
• Ecological feasability • Sustainable use of materials
Focus on environmentally
Materials
friendly materials • Ecological correctness • Partnership with organizations equally
concerned
• Social concern
Laws Legislative compliance • Health and Quality of Life
• Cultural acceptance
Environmental awareness
• Climate
Physical activities
• Waste
Society
Health Care
The environmental and social responsibility have always been part of JBS´s development and business growth.
Formal education The Company’s extensive experience proves the importance of the reduction of environmental impacts and the
improvement of its relations with the community, throughout constant investments that focus these issues.
14
16. Corporate Governance
JBS has embraced a Corporate Governance model with a view to implant the best practices in the Company. The view is that the model
demonstrates transparency and confidence to the public, guaranteeing the best products and services for customers, solidity for
suppliers, satisfactory return for shareholders and the certainty of a better future for all JBS collaborators.
Novo Mercado
JBS is part of the of BM&FBOVESPA´s Novo Mercado, is in accordance with all requirements of this market and with the obligations imposed by the
current Brazilian legislation.
Management and Board of Directors
Board of Directors - JBS’ Board of Directors is formed by 7 members – a president, a vice-president, 2 effective councils without specific
denomination and 3 independent effective councils.
Audit Board - The Audit Board shall consist of at least 3 and at most five 5 sitting members and alternates in the same number, shareholders or not,
liable to be elected or dismissed at any time of the General Meeting.
Board of Executive Officers - The members of the Company’s board of executive officers are elected by the board of directors, for three-year terms,
and are eligible for reelection.
Board of Directors’ Committees
The Board of Directors has approved the establishment of the following Committees: Audit, Financial, Personnel Management and Corporate
Strategy, that incorporates the Sustainability matters.
Publishing and Use of Information
JBS is completely in accordance with the CVM 358 instruction that revised and consolidated the requirements regarding the disclosure and use of
information related to material facts and acts of publicly held companies, including the disclosure of information in the trading and acquisition of
securities issued by publicly held companies.
Conduct and Ethic Manual
JBS Executive Officers have developed a Conduct and Ethic Manual according to the corporate governance best practices concept. The conduct
code embraces the relationship between the members of the board, shareholders, employees, suppliers and all the other stakeholders.
15
17. JBS American Depositary Receipt (JBSAY)
The Bank of New York Mellon, has been selected by JBS S.A. as the depositary bank for its
American depositary receipt (ADR) program. Each JBS ADR represents two common shares
and they are traded on the over-the-counter market under the symbol “JBSAY“.
The new program did not represent an increase in the share capital or issuance of new
shares.
This step represents an opportunity to increase the liquidity, visibility and value of JBS
shares.
The Company believes that the program will help readjusting the share price to its reasonable
currency level, considering that more than 80% of the Company’s revenue is in American
Dollars.
In May 2009, JBS became the first Brazilian Company to have its ADRs traded under de
OTCQX, a kind of “Novo Mercado” of the North American over-the-counter market. This
pioneer step reflected as an increase of 331% in the average daily traded volume of JBS’
(JBSAY) stocks in New York.
100.000
85.370
80.000 ADRs’ traded volume (JBSAY)
70.770
60.000
40.000 28.800
16.300 18.800
20.000 11.000 12.900
0
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09
16
20. Combined Financials
JBS S.A Pilgrim's Pride Bertin S.A. Combined
logo logo logo
R$ million Jun 2009 FY09E (2) Jun 2009 TOTAL
Results
Net Sales LTM 38,680 (1) 14,778 (3) 7,224 60,683
Ebitda LTM 1,482 (1) 469 (3) 776 2,727
Ebitda Margin 3.8% 3.2% 10.7% 4.5%
Gross Indebtedness 6,226 4,914 4,628 15,768
Cash and cash equivalents 2,299 496 702 3,496
Net Debt 3,928 4,418 3,926 12,272
Net Debt / Ebitda (4) 2.6 9.4 5.1 4.5
Net Debt Pro Forma / Ebitda (5) -0.6 9.4 5.1 2.7
Source: Companies
(1) Pro forma figures
(2) Fiscal year from October to September
(3) Does not include Mexican operation
(4) Does not include capital increase
(5) Considering US$2.5 billion capital increase in JBS USA
19
21. Creation of the largest protein company in the world
Combined company will have a leading position in the global market
Combined company will have a leading position in the global market
Global ranking of protein companies (US$ million)1
largest global protein
1a
company
28,725 28,130
12,717 12,488 12,088
10,494 9,457
6,755
Source: Companies, Exame, Valor Econômico and CNN (Global 500)
1 Based in net revenues of 2008 and including Pilgrim’s Pride in Bertin + JBS
20
22. Leader company in the protein industry
Ranking
Ranking Presence
Presence Installed capacity
Installed capacity Industrial units
Industrial units
Brazil / Argentina Brazil: 43,400 heads/day Brazil: 39
/ Italy / Australia / Latin America: 6,700 heads /day Latin America: 8
U.S.A. / Uruguay /
U.S.A.: 28,600 heads/day U.S.A.: 13
Beef
Beef 1 Paraguay
Italy: 3,000 heads/day Italy: 8
Australia: 8,690 heads/day Australia: 10
Total: 89,790 heads/day Total: 82
U.S.A. / Mexico U.S.A. / Mexico: U.S.A.: 34
7.2mm birds/day Mexico: 3
Poultry
Poultry 2
Total: 7.2mm birds/day Total: 37
U.S.A. U.S.A.: 48,500 heads/day U.S.A.: 3
Pork
Pork 3
Brazil / U.S.A. / Brazil: 148,500 m2/day Brazil: 12
Leather
Leather 1 China
Brazil Brazil: 1,266 ton/day Brazil: 7
Dairy
Dairy 3
21
23. Expansion of global leadership and geographic diversification
Presence in over 23 countries across five continents
Presence in over 23 countries across five continents
Slaughterhouses and Industry Beef
Distribution Centers / Commercial Offices Distribution centers
X Processed products Leather
Pork Dairy
Ovine Vegetable fat
Leather Pet products
Poultry
Source: Companies
22
24. Strategic Rationale
Pilgrim’s Pride Acquisition Bertin S.A. Association
• Opportunity to enter in the poultry • Diversification into new segments with
industry as one of the largest significant presence in the dairy industry
companies in the world (Net revenues
of US$8.5bn in FY 2008) • Creation of the largest leather
processing company
• Integrated distribution of Pilgrim’s Pride
is aligned with JBS direct distribution • Potential gains of scale, with estimated
strategy synergies of R$ 500 million / year
• Potentially higher margins • Expansion of distribution channels
(Retail and Food Service)
• Traditional brands
• Optimization of the industrial assets
• US$200m/year of potential synergies due to its geographic complementarity
• Capacity of adding value through
turnaround process by the
implementation of better operating and
managerial practices
• JBS USA exports growth
23
25. Creation of the largest protein company in the world
Leader in beef processing in Brazil, Total revenues of approx. US$30
Australia, Argentina and Italy and one billion
of the leaders in the US
Global processing capacity:
Third largest pork processor in the US
- Beef: 90.4 thousand heads/day
Leading company in the poultry
- Pork: 48.5 thousand heads/day
industry in the US and in the world
- Poultry: 7.2 million birds/day
Global leader in leather tanning
- Smalls: 19.5 thousand heads/day
- Leather: 148,500 m2/day
- Dairy: 1,266 tons/day
Complementary companies
Source: Companies’ estimates
24
26. Transaction summary
Pilgrim’s Pride acquisition
Pilgrim’s Pride acquisition Association with Bertin S.A.
Association with Bertin S.A.
Firm value of US$2.8 billion Bertin and JBS controlling shareholders will
contribute to a new Holding company their
Initial acquisition by JBS S.A., through its stakes of 73% and 51%, respectively
JBS USA subsidiary, of new issued shares
representing 64% of Pilgrim’s Pride total It is estimated that the respective equity
capital value of Bertin and JBS should be in a
proportion of approximately 40%-60%
Estimated synergies of US$200 million/year
Estimated synergies of R$ 500 million/year
Customary precedent conditions, including:
- Approval by the competent antitrust Customary precedent conditions, including:
authority - Approval by the competent antitrust
- Final approval of the Reorganization authority
Plan in the Bankruptcy Court (Chapter - Due Diligence
11 of the United States Bankruptcy
Code)
JBS is in an advanced negotiation for a capital increase of US$2.5
billion in JBS USA, resulting in a maximum stake of 26.3% after the
capitalization
25
27. Ownership structure post transactions
Ownership structures before transactions Ownership structure post transactions
Market
Batista
including
Family BNDES
Batista Bertin
51.4% 48.6%
Family Family
JBS S.A.
Controlling Market including
Holding BNDES
Bertin ~60% * ~40% *
BNDESPAR
Family
73.1% 26.9%
JBS S.A. Investor
Bertin 100% ≥73.7%
Other JBS U.S.A.
Bertin
subsidiaries Includes AUS ≤26.3%
Pilgrim’s
Float 64% Old
shareholders
shareholders
35% 65%
36%
Pilgrim’s
Pilgrim’s
Pride
Pride
* Controlling shareholders’ estimates
26
28. Pilgrim’s Pride overview
Profile
Profile Recent Events
Recent Events
One of the largest producers of chicken with Dec. 2006: Acquisition of Gold Kist for US$ 1.1 bn
extremely well-known brands in this industry May 2008: Public Primary Offering of 7.5 million
Plants in the US, Mexico and Porto Rico shares at US$24/share (total of US$180m), aiming
Vertically integrated company to reduce leverage
Chicken production in 2008: Nov. 2008: Rating downgraded by S&P
– 3.8 million tons Dec. 2008: Company files for Chapter 11
Slaughterhouses: (Bankruptcy protection)
– 33 in the US, 3 in Mexico and 1 in Puerto Rico - Company was delisted from NYSE and started
Employees: ~ 41 thousand to be traded over-the-counter
Distribution centers: Feb. 2009: Shares reach their lowest historical
– 6 in the US, 18 in Mexico and 1 in Puerto Rico price of US$0.15/share
Net revenues (US$ million)
Net revenues (US$ million) EBITDA (US$ million) and margin (%)
EBITDA (US$ million) and margin (%)
5.5%
2.8% 3.2%
8,525
7,499 7,095* 414
143 225 *
5,153
-9.6%
-821
FY06 FY07 FY08 FY09E FY06 FY07 FY08 FY09E
Source: 10K, 10Q and Pilgrim’s Pride Plan of Reorganization
Pilgrim’s Pride fiscal year is from October to September
* Does not include Mexico operations
27
29. Footprint expansion in North America
Pilgrim’s Pride Acquisition will strengthen JBS’ presence in North America
Pilgrim’s Pride Acquisition will strengthen JBS’ presence in North America
WA MT ND
MN
ME
SD WI VT
OR ID
WY MI NH
NY
IA MA
NE D CTRI
D D
OH PA
NV IL IN NJ
UT D CO M D
KS MO WV D DE
CA KY VA
TN
OK NC
AR
AZ NM
D D MS
D D SC
AL GA
D
TX
LA
D
D
D
FL
D
D
MEXICO
D D
DD D
D
Subtitle D
D
D D
D D D
JBS USA production units DD
D
D JBS USA distribution center D D
Pilgrim’s Pride production units 28
D Pilgrim’s Pride distribution center
30. Bertin Overview
Description
Description Net Sales Breakdown (R$ million)
Net Sales Breakdown (R$ million)
Established in 1977, Bertin has 38 2008
production units and 28 thousand
employees 7%
- Present in the beef, dairy, leather and pet 12%
product segments with several nationwide
well-known brands, e.g. Bertin, Vigor,
Leco and Danúbio 13%
- Units in Brazil, Uruguay, Paraguay and
China 68%
- Exports to more than 110 countries
Production Capacity:
- 16,450 head/day (2009E) Beef Leather Dairy Others
- 21,400 hides/day (2009E)
Net Sales (R$ million)
Net Sales (R$ million) EBITDA (R$ million) and margin (%)
EBITDA (R$ million) and margin (%)
13.2%
7,224 10.5% 10.7%
6,626
5,188
687 694 776
2007 2008 LTM 2007 2008 LTM
Jun09 Jun09
Source: Bertin
29
31. South America production base
The combined production units places JBS at the forefront in South America
The combined production units places JBS at the forefront in South America
PA
AC
RO
MT
BA
GO MG Brazil
Paraguay MS
RJ
PR SP
SC
SF
CO ER
Uruguay
BA
Argentina
Combined companies
30
32. Final remarks of the Transactions
• Complementary activities and consolidation of the global leadership in the
protein industry will be strengthened through the association between JBS
S.A. and Bertin S.A.
• Entry in the poultry industry through one of the leading companies in the US
industry
• Acceleration of direct distribution strategy through the IPO of JBS USA
• Appropriate capital structure
• Significant opportunity of adding value through synergy gains
• Proven track record in acquisitions, integration and restructuring of
companies
• Resuming growth through acquisitions and partnerships
31
36. Debt
• Considering the seasonality with the production increase in a high moment of high demand
for beef, the Company maintained its leverage on the same levels of the preview quarter.
• The Company has improved its net debt in comparison to the 1Q09. The short term debt
decreased 47% in 1Q09 to 39% in 2Q09 against the total debt.
Net Debt / EBITDA Pro Forma per Quarter Debt Profile
Net Debt = R$ 3,928MM
= 2.6 100%
EBITDA pro forma = R$ 1,482 MM
80%
2.8 2.6 *
50% 53%
2.3 2.5 61%
2.0 60%
40%
50% 47%
20% 39%
0%
2Q08 3Q08 4Q08 1Q09 2Q09 2Q08 1Q09 2Q09
Short term Long term
Source: JBS
Net Debt/ EBITDA EBITDA pro-forma
* LTM including Smithfield Beef pro-forma.
35
37. Cash and Availabilities
R$ Million 06/30/09 03/31/09 Var.%
Net indebtedness 3,927.7 4,173.8 -5.9%
Cash and cash equivalents 2,298.7 1,798.0 27.8%
Current 2,411.9 2,780.0 -13.2%
Long term 3,814.5 3,191.8 19.5%
Gross indebtedness 6,226.4 5,971.8 4.3%
• Besides the cash and cash equivalents noted above, the US and Australia
subsidiaries of the Company has availabilities of approximately US$ 560 million
under their existing credit facilities that provide additional liquidity.
• Therefore the Company’s total liquidity including the availabilities under its credit
facilities:
R$ Million 06/30/09
Additional availability 1,092.9
Cash and cash equivalents 2,298.7
Total Liquidity 3,391.6
36
38. JBS Consolidated Exports Distribution
Revenue Distribution by Market 1Q09 Revenue Distribution by Market 2Q09
Exports Exports
22% 26%
Domestic Market Domestic
78% Market
74%
Exports Distribution 1Q09 Exports Distribution 2Q09
JBS Exports2Q 09
US$ 1,169.1 Million
Taiwan Taiwan O thers
O thers Japan 2% Japan
2% 14% China 14% 18%
Middle East 16%
4%
4%
E.U. E.U.
16% Hong Kong
Canada 15%
5%
4%
China South Korea
5% USA Africa and USA
Hong Kong South Korea Canada 6% Russia Mexico
Russia Mexico 11% Middle East 9%
5% 6% 5% 7% 7%
8% 9% 8%
JBS Exports 1Q09: US$ 904.1 Million JBS Exports 2Q09: US$ 1,169.1 Million
Source: JBS
37
40. Disclaimer
The forward-looking statements presented herein are subject to risks and uncertainties. These statements are
based on the beliefs and assumptions of our management, and on information currently available to us.
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions
because they relate to future events and therefore depend on circumstances that may or may not occur. Our future
operating results, financial condition, strategies, market share and values may differ materially from those expressed
in or suggested by these forward-looking statements. Many of the factors that will determine these results and
values are beyond our ability to control or predict.
Forward-looking statements also include information concerning our possible or assumed future operating results,
as well as statements preceded by, followed by, or including the words ''believes,'' ''may,'' ''will,'' ''continues,''
''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions.
39
